Now that America-hating Islamists control three-quarters of Egypt’s parliament and the military government has rejected American protests at the prosecution of U.S. citizens for supporting democracy, Egypt is asking for $11 billion in Western aid. That has to be the least popular idea to float down the Potomac in a long time. Nonetheless, the Obama administration and its supporters in the Punditeska doubtless will ask American taxpayers to ante up a large part of the $11 billion handout, in the interest of ”promoting Egyptian democracy.” Only in America do we feed the mouth that bites us. CPI Financial News reported on Sunday:

Mumtaz El Saeed, Egypt’s Finance Minister, says the country needs $11 billion to help it get through the next fiscal year, as well as help with economic reforms, according to a report in Al Ahram, a local newspaper.

This comes as rating agency Standard & Poor’s lowered its long-term foreign- and local-currency sovereign credit ratings on the country to ‘B’ from ‘B+’; with a negative outlook.

S&P said that Egypt’s external position has deteriorated and is likely to weaken further, absent stabilisation in the domestic political situation alongside external financial support.

“Egypt’s external financing risks have risen significantly, with foreign direct investment having declined sharply and net portfolio flows also having turned negative. Egyptian Central Bank interventions–to support the Egyptian pound in the face of significant capital outflows and double-digit annual inflation–have resulted in a sharp decline in net international reserves. These were $16 billion at end-January 2012, down from $36 billion at the start of 2011. Historically, S&P’s assessment of Egypt’s external score has been a relative strength to the rating; this is now being eroded. It estimates that net international reserves, excluding gold, now cover less than three months of goods and services imports compared with more than six months at the start of 2011,” the rating agency said.

What Egypt’s reserves might be is unclear — the New York Times recently published an estimate of $10 billion, or less than two months’ imports — but at least half of the $20 billion to $25 billion loss in reserves is the result of flight capital. Only half reflects the minimum, essential import needs of a broken economy that imports half of its caloric consumption.

Wealthy Egyptians, that is, are moving their money out of the country at the rate of $2 to $3 billion a month. The actual rate is higher, because a great deal of diesel fuel, propane gas, rice, wheat, and other things are stolen and sold overseas. As I reported (exclusively in the English-language media) last October, Egypt’s generals fired all the outside directors of the country’s central bank, which means that no-one outside the military knows precisely what is happening. After sixty years of military rule, Egypt’s military runs the Egyptian economy, which means that most of the capital leaving the country belong to the generals or their friends and family.

To ask Americans to pour more money into this kleptocracy is outrageous. Like Somalia, ordinary Egyptians will never see the benefits. But that is precisely what the Obamoids will demand. Washington Post columnist David Ignatius, for example, begs America not to cut off aid in response to Egypt’s provocation:

What kind of democratic revolution in Egypt is it that brings charges against 19 American non-governmental organization workers who have been advocating democracy? The answer is that it’s a confused revolution, looking for people to blame for its troubles. The United States should stifle its anger for now – and avoid a hasty cutoff of aid that would make a bad situation worse.

Ignatius sounds like comedian Joe E. Brown at the end of Some Like It Hot: No matter what Egypt does, his response will be, “Nobody’s perfect.” Of course, Egypt is not only asking the United States not to suspend the $1.3 billion in aid that it already gets, but to hand over a great deal more. No doubt some colonels haven’t bought their 100-meter yacht yet, and it hardly seems fair.

Fortunately this is an election year, and Republicans can use the Egyptian fiasco as a horrible example of budgetary waste.

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1.
Peter Boston

How about we give them $1 billion for every 1,000 Christian churches that get built in Egypt? I suppose a combination of churches and synagogues would also work.

Let’s get some evidence of civilized behavior before dispensing any cash.

‘And so here we go, with a bunch of Islamist Mafia Gangs trying to run an extortion racket, all of them hoping to use Iran and its impending Nuke as their Muscle’……..are you talking about the US or Egypt?

I think he means Egypt is engaging in the same sort of brinksmanship as Cleavon Little in Blazing Saddles; holding a gun to his own head while exhorting everyone else to drop their own or “I’ll blow this [N-word]‘s head all over this town!”

You can see the future and it is not pretty: what usually happens when there is economic collapse? – someone gets blamed and war follows. And who among all people might Egypt blame?

I support Egypt’s selection of the Islamists. Only by taking the ideology of Bin Laden and seeing it utterly discredited will Egypt either collapse into Somalia on the Nile or become a modern state. Hope for the best but don’t be surprised at the worst. Look at a poster of the al Nour party candidates. Notice how they have callouses on their foreheads? Bin Laden’s number 2 Zawahiri has one too. These are radicals to the core. They have committed murder and will commit many more murders before they are done. They are a curse on the Egyptian people and mankind. It is not a question of if war with Egypt and at least one of its neighbors will come, it is only when.

The Brotherhood and the Salafists in al Nour and criminal barbarians; just watch as they make 911 an Egyptian holiday and name a street after Mohammed Atta. He was one of theirs too. The Muslim Brotherhood took weapons and aid from Hitler, they adored him; do you think they got any more moral since WWII?

Fortunately, the best revenge is to live well but blood will be shed. Spengler is too right by half and we are in for very bad years of war.

“Why is Goldman so obsessed/concerned with (the economic collapse of) Egypt (and Turkey)?

America, Europe and Israel are all collapsing/disintegrating in front of our eyes – and Goldman keeps putting out one article after another about Egypt & Turkey. Amazing…”

Do u actually read his articles? He has written about the failures of the US and Europe prolifically! That includes bashing Bush for his economic and foreign policy failures and the damage he has done to US. But as he said about Egypt, “its not often that u watch a nation of 80 million people go belly up”. That day appears to be approaching. So this is relevant now.

I kinda feel how I felt about quantitative easing. I was very bearish on treasury bonds a few years ago. So was David. His words were “last one out of treasuries is a rotten egg”. I had actually gone short the treasury ETF. Fundamentally, it was a good bet. More debt USUALLY means higher interest rates and lower treasury prices. But then Bernakee started QE1 and killed all the bond bears! After all this anticipation of watching Egypt blow up, it would be VERY anti-climactic to have them bailed out. But I guess the reality is that if they r facing mass starvation there wont be a choice but to send food.

It is America, Europe and Israel who are collapsing/disintegrating in broad daylight – yet, Goldman keeps talking about starving Egyptians… What do you think the average American is more concerned about America/Europe/Israel collapsing, or Egyptians starving?

America has a $15+ Trillion National Debt — 100% of GDP (and rising) etc. The CBO projects a $1.1 trillion deficit in 2012; and Obama projects a $1.3 trillion deficit in 2012…

David, as a Jew you can simultaneously be accused of being a capitalist and a communist, a religious fanatic and an atheist, a stiff necked sectarian and a chameleon-like infiltrator of the heights of our society … but I would never, never accuse you of being a metrosexual.

Israel is not collapsing. The Israeli economy grew 4.3% in 2011, birthrate is the highest in the modern world – 3 children per female – much higher than any of her Arab enemies, who are, indeed, collapsing.

Which, incidentally, will solve the “Palestinian problem.” Today, Jews are 75% of the Israeli population. When they are 75% of the entire region between the Mediterranean and the Jordan, they can merge with Judea and Samaria to form a single state, something Palestinians have been calling for, themselves.

I’ve written about all these other things, two. But if the prospect of a country of 80 million people disintegrating into chaos doesn’t interest you, I suppose the best one could say is that you are incurious.

What is happening in Egypt was extremely predictable. Anyone with a modicum of intelligence could see what was coming. It was so obvious and so predictable. You didn’t need Ruach HaKodesh to see this one coming.

BTW, The neocons got exactly what they wanted… i.e. the overthrow of Mubarak, elections…

The Muslim Brotherhood and Salafis best friends are the braindead neocons (Sharansky, Kagan etc.). The neocons enabled the fantics…

What is happening in Egypt was just as predictable as what is happening in Libya.

It will be interesting to see which, if any Republicans, focus on the current administration’s disastrous, perhaps intentional, ineptitude vis a vis the Arab uprisings. The Republican party has been infiltrated by Islamists nearly as much as the Democrats. The difference is that the the socialist/crytpo-communists who running the democrat are the Islamists’ soul brothers. They lack such natural allies in the Republican party. By the way, Mr. Why, I’ve always found the neocon position to be a bit unrealistic. My soul mates are some combination of Vladimir Jabotinsky and Andrew Jackson. Dig it.

Thank Grover Norquist’s radical Palestinian wife for a lot of that recruitment.
Some have even whispered the name “Bush family” and their many ties to our great and good friends and allies, the Saudis, paymasters of global terror.

Who’s organizing the rioting in Greece?
Why, public sector union workers, of course!
Since “Occupy” is funded and organized by SEIU, IUEW, and AFSCME, we can expect to see a little Direct Action here by the election!

I know I shouldn’t feed the troll, but it’s worth pointing out that Greece is front page news (AP: “Blah, blah while Athens Burns”) and anyone with a clue can extrapolate to those next in line (e.g. the weakest of the PIIGS) and plenty of us in the US can see what’s coming if we don’t drastically change course.

Whereas today the upcoming Egyptian disaster “of biblical proportions” isn’t getting much attention. That will of course change once there are scads of starving children to film, especially if the central government devolves in e.g. a Somolia direction. And this has a lot of implications.

Since Spengler’s warning, I’ve been awaiting ragged flotillas of AEgyptian boat people hoping to join their co-religionists in the EU.

Interesting question on the camera time- I don’t see video about the 10,000 immigrants per day hitting the Isle of Man or backwater Greek vineyards.

But then, the Left didn’t have much to say about my Lao neighbors, the original boat people, in the 80s. (Or the Muriel boatlift that spread Angolan AIDS from Cuban prisons to the gay havens of Key West- and thus throughout America’s male homosexual ‘community’. Remember the the mysterious ‘mystery virus’)

p.s. thanks, poster, for the heads up on Christie- cutting deals, huh?
I sorta knew this had to happen since listening to some of the largest AM stations in both Jersey and Detroit- they’re Arabic.

You can call me a neocon, a Likudnik, a crypto-Zionist, and Israel-firster, an Elder of Zion, whatever, I don’t care.

The best thing would be for everyone in the Arab/Muslim world to come to their senses forthwith and cease this ruinous anti-Semitic and anti-Western jihad that is consuming their societies. But I don’t expect that to happen.

In the absence of sanity, the best thing for Israel is for Egypt to simply collapse in a heap. If the reports of capital flight are true, it seems obvious that the generals don’t put too much hope in their chances should it come to war. If and when it does, any “army” they will be capable of fielding will not be able to do any real damage to Israel. To the extent that the Muslim Brotherhood is in charge, and has any actual control over the situation, you can be sure that they will do everything they can to strengthen the growth of terrorist groups in Gaza and the Sinai. If they have to contend with food riots in Cairo they will have that many fewer resources to use against Israel.

And if we’re really lucky, Saudi Arabia et al will have their hands full with Iran and will not be able to help Egypt stave off the inevitable collapse.

The Prophet Yeshayahu said that at the time of the redemption G-d would make the enemies of Israel “drunk on their own blood as with sweet wine.”

To the extent that the Muslim Brotherhood is in charge, and has any actual control over the situation…

Here’s one thing I’m wondering based on the title of this piece: isn’t the Muslim Brotherhood in Egypt well known for their “good works” (charity/civil society sorts of things), stuff they turned to after learning very hard lessons about trying to directly take power?

If so, and if they were really in charge, would we expect the widespread starvation predicted if Egypt gets this money (since the current corrupt rulers will steal lots or even most of it as they are doing today, one of the reasons various parties have stopped sending food to North Korea)?

On the other hand, to the extent they’ve based their appeal on good works, if they “allow” a “disaster of biblical proportions” wouldn’t they take a big hit politically? Being in the middle (between the corrupt ruling class and the Salafis) typically isn’t a good place in a crisis….

Just like Hamas in Gaza was known for its charitable good works to keep its “voters” tied to the cause, until the start of Arafat’s violence in 2000, when they had to destroy the industry Israel set up on the border, to keep the people dependent and out of the generous clutches of Arafat’s 1993 Oslo signature.

per Spengler: quarantine, quarantine, for the gods’ sake, Quarantine!
per Democrat communists: easier to import voters loyal to the Party, not the country. Even better if they’re willing to work as Enforcers under our direction- that’s what Basiji mercenaries do.

Give them nothing and demand the immediate release of all of the hostages within 24 hrs. Tell them if any are harmed or killed then the graneries and the dockyards will be the first to be vaporised followed by the barracks and the rest of their military apparatus.

That will get their attention.

As soon as ALL the hostages are secure, cut the foreign aid to zero and tell them that any attempted reprisals on US soil or against US interests will be met by a nuke into the base of the Anwar dam.

Egypt is turning into the new Pakistan, only Egypt is in North Africa. Just like in Pakistan, we keep paying billions of dollars in “aid” while they harbor some of the worst Islamists and terrorists in the world. And, as in Pakistan, the Egyptians feel the need to trash the United States every chance it gets, even though they owe their new-found “freedom” to Obama. Little do they know they only traded one dictator, Mubarak, for an oligarchy headed by the Muslim Brotherhood and the Salafists. Just wait, like the Pakistanis, the Egyptian Army will continue to threaten us by saying, “Well, if you don’t give us billions in aid, things could be much worse in Egypt.” Well, the Pakistanis hid Osama bin Laden from us for years. How much worse could things get between our countries? Soon Egypt will be doing and saying the same things as Pakistan, and we can all see how well that arrangement is going.

So true. Mullah Omar was Pakistan’s puppet.
They will milk-and-bilk us just like Pakistan, Palestine, the Saudis, etc.

Still, this creates great opportunities for the ‘security contractor’ companies- just who is paying for Dynacore, Executive Solutions, and XL Blackwater, anyways? I think the MENA is being, ahem, ‘cultivated’.

The Muslim Brotherhood Islamist strategy has been to give food and aid to the poor first.

Perhaps the USA should give charitable food aid to the Egyptians instead of funds, or at least significantly reduce our funds replaced by a comparable value in food. This food aid should be delivered on American flag ships with American trucking delivered by Americans. Large sacks of American grown rice and wheat emblazoned with an American flag. The food should be handed out at community locations and distributed by Americans. There should be a registration process for this food to minimize theft.

Then wild rumors will spread throughout Egypt. They will say the food is poisoned or that it has chemicals in it that will keep women from having babies or that their children will be hurt by this food.

But eventually people get hungry and this poisoned treachery will be the only thing available. When people see after one year that those who take the American food are not hungry, then they will see Americans as their friends.

Of course, this is all fantasy. We would give the food to Egypt. The Muslim Brotherhood would paint over the American flags and put Brotherhood logos and sayings of from the Koran on the bags.

Mr Goldman,
Only in America? I don’t think so, the EU will also be donating a lot of funds confiscated from EU sheeple.
The answer is so simple; the Egyptian Govt. needs to call Israel and ask for help in organizing a society that will attract private capital and be able to allocate it’s resources in a manner that will sustain it’s people. Egypt may not have much oil but it does have plenty of fresh water (much more valuable).
That is not going to happen of course, but not because the Israelis would not help, Jews are rational people, but because Egypt won’t ask.
It occurs to me that the US may want to ask for the same help, that won’t happen either and for the same reasons.

I hope Obama and the media trash here don’t fall all over themselves in the rush to pick up the largest part of the tab. “Fostering democracy” will be one cover used, but you can bet some of the aid will be used for weapons. Meanwhile Christians are still at severe risk in Egypt, but who in leftist politics care about them, or their lives.

That’s why they never intend to pay ‘the debt’ back, or off-
it’s just an unlimited credit card for consolidation moves by the post-national Industry. Capitalist production has nothing to do with the new economics.

Actually think of these actions as a compromise of many different parties in the US.

First are the hard lefties who think that outreach and money can trump interests and principles, that is you buy them off. They believe that some sort of inchoate democratic actions will provide true legitimacy no matter the result. Once you have that you can deal.

Second are like unto first who want to make Egypt financially dependent on the US to be able to change behavior. The issue is that such threats only work up to the point where the leaders lose their jobs if they submit. Nancy Birdsall is quite good on this line of thought.

Third there are those who believe that something horrid would happen if Egypt were deserted and left to its own devices. it is the ‘Greater Devil’ argument used with the old USSR.

Fourth are those who merely want to let things continue without roiling the waters, Micawberesque, hoping something will turn up.

Fifth there are more than a few who hope for to discredit the other points of view, giving Egypt time and resources to demonstrate it hostility.

Lastly, allowing events to run its course will by giving Egypt a truly legitimate government in the eyes of the world, on that truly reflects the will of the people. In that way, if necessary there will be no view of protecting innocent civilians if a war results.

There is nothing that cannot be explained without moralistic pronouncements, by looking at the cui bono or competing interests.

I chalk this up to bureaucratic inertia. I think it was Mr. Goldman who once wrote about how Eurocrats would continue to fund the PIIGS because they could not imagine any other policy.
The same goes with pouring money into Egypt. It is not an ideological thing, it is simply that the State Department bureaucrats’ answer is to open the money spigot. This has been standard operating procedure for so long that’s all they know how to do to address a crisis. They cannot conceive of any other response.

More like serious history just isn’t taught anymore, at least in the public primary and secondary schools. Going back a long ways, I entered college in 1979 but except for my own history reading wouldn’t have known what that symbol had been used for.

To show an extreme example, I took a history seminar on the Renaissance at MIT in the mid-80s, a handful of students or so, and at one point the professor asked in sort of Jeopardy style a question who’s answer was “the French Revolution”. I was the only student who could answer it; he remarked to me in private as we were leaving that day that if no one had answered it he would have seriously considered retiring.

Now, I grant that studying history is something I like and still do today, but….

Those articles are excellent reviews of the larger educational picture in all its absurdity. The massive social impact of it remains hazy until one looks at obviously professional Marines and see the product of the terrible educations they receive. I run into Americans whose educations emphasized the desired feelings (“discrimination is bad”) but who lack the appropriate information to understand why something may be considered right or wrong.

I run into college professors who don’t even know what the SS symbol was so I suspect that the lack of information on the extent and character of evil organizations in the past gets lost as foolish people try to look tough. The foolish and the “macho” will always be part of human society but the lack of facts many people receive allows them to seek “bad-$#@” things in the wrong places.

I fear that the State Dept. and U.S. military will advocate such “aid” so the individual USG employees involved can retain their “influence” at the expense of the greater good that could be accomplished by withholding aid: an Egyptian military and ruling class that sees no alternative to democratic reforms.

The story is finally starting to break through in the Mainstream Media. Even the Washington Post now is aware that there is a problem. To me, this is a sign they are gearing up to push large scale emergency relief when the time comes. I am not sure it is going to work this time, especially given the scale of the problem, but watch as the press prepares the battlespace. It will be interesting to see how this playes out in terms of a presidential campaign as well.

The drudgereport is now reporting that the new Egyptian government is trying to shake down the West for more aid money by threatening to terminate the peace deal with Israel if they do not receive it. Threatening Israel as a means to shakedown the West for more money is one way the Islamist junta can delay the inevitable crash of Egypt’s economy.

Give Egypt nothing until the hostages are released. Squeeze them just as hard as they are trying to do to us. It is nothing more than blackmail, or extortion.
I just wish we would drill here, drill NOW, and drill everywhere so in 5 years we can flush that toilet of the middle east once and for all. Let China and europe play with islam all by themselves.

Stupid Paulbots, I’m so glad the GOP didn’t count two or three counties in Maine where the Ronulans were winning but announced a winner without multiple tallies from February 4th. Because cheating to stop Ronulans is a ok and American as apple pie.

Top U.S. General: Iran hasn’t decided yet on whether to build nuclear weapons, wants to be ‘nuclear threshhold’ state. I wonder how the Paulbots got to him, huh?

Interesting that Gene suggests a ‘one state solution’ — 50 or 60 years hence when Israeli Jews are a majority in the Levant. Who only knows what Israel will look like by that time, hopefully with cheap desalinization to make room for the expanding population in the Negev, pretty good. Seems to me that ‘Jews are doomed to be the minority in historic Roman Palestine’ is not unlike the ‘Russians are doomed to die out, to be replaced by Muslims/Chinese invaders with their natural resources going to others’ determinism so in vogue ten years ago.

Re: “That can’t be good. And the implications for American strategic vulnerability are daunting. I am told that most of the chips that will go into the new F-35 fighter will be manufactured in China.” David, it has already been reported various places in the national security world that micro-processors and computer chips of Chinese manufacture have been found to have hidden “trapdoors” and designed-in flaws that can be exploited by the Chinese should war come between our nations. Kevin Freeman touches briefly on this subject in his new book, “Secret Weapon,” (Regnery, 2012), should you be interested…

As a matter of national policy, it is the height of folly to willingly out-source strategically-important industries, the design/manufacturing of weapons, or critical production of strategic natural resources. Back at the height of the Iraq War, for example, a little-noticed item appeared in the press – that the DOD had recently let a very large contract to an Israeli firm for the manufacture of 5.56mm ammunition of the kind used by our M-16/4 family of weapons which are the std. assault rifle of our forces. Granted, Israel is a staunch ally, but the main point here is that we lacked the manufacturing domestic capacity to produce sufficient ammunition for our forces.

Re: “It will be interesting to see which, if any Republicans, focus on the current administration’s disastrous, perhaps intentional, ineptitude vis a vis the Arab uprisings”

Avram, as the IT guys say, “That’s not a bug, it is a feature….”
In other words, what you call ineptitude is action taken volitionally and with intent. Obama has always been in favor of the Muslim Brotherhood coming to power in the ME, in as many places as possible. He’s made no secret of such desires over the years…